DESCRIPTION (Verbatim from Applicant's Abstract): The use of putative "pancreatic stem cells" has been recognized as a potential source for engineering beta cells for the cure of diabetes mellitus. We found that the embryonic pancreatic epithelium is able to form each of the three elements of the mature pancreas (endocrine, acinar, and ductal), depending on the specific extracellular growth environment. We have focused on extracellular signals that may play a role in the normal development of early embryonic epithelial cells into beta cells, since such extracellular factors may have potential therapeutic use for engineering insulin-producing beta cells in vitro without the need for genetic modiftcation. Activins, members of the TGF-beta superfamily of signaling molecules, are important for endocrine differentiation both endogenously in the normal developing pancreas, as well as exogenously when added to pancreatic cells or pancreatic rudiments in culture. Activins have a dosage window in vivo such that either blocked expression, or constitutive expression, both yield hypoplastic islets of Langerhans, whereas proper signaling yields normal islets. In vitro, in embryonic pancreas, we found that intermediate doses of activin are pro-endocrine, but high or low doses are not. Further, in cell lines resembling embryonic pancreatic epithelium (AR42J), activin alone induces endocrine differentiation, but with a high rate of apoptosis. Additional cytokines (HGF or betacellulin) with the activin, however, prevent apoptosis and induce insulin-expression. The central hypothesis of this grant proposal is that changes in key intracellular components of the activin signaling cascade (specifically smad2 and smad3) are critical to activin-regulated insulin-positive differentiation. Furthermore, HGF then modulates smad signaling and thus enhances insulin-positive differentiation. We wish to determine the optimal doses of exogenous and/or endogenous activin and/or HGF in terms of induced insulin differentiation, as well as the relationship of optimal insulin expression to the expression level of smad molecules that are critically important to activin and HGF signaling (smad2 and 3). Furthermore, the importance of these smad molecules to insulin expression will be confirmed through antisense and transgenic strategies. In this way, we hope to use this intracellular signaling as a guide to optimizing the manipulation of pancreatic endocrine progenitor or stem cells into p-cells.